LVMH gets into… blockchain?
You did not misread this article’s headline: the world’s largest luxury company, LVMH, is planning to launch its own blockchain – a technology most often assumed with ensuring transparency and authenticity in cryptocurrency payments. We say “is launching” but “is allegedly launching” may be closer to the truth – blockchain experts at CoinDesk (an online specialist publication) broke the news this week, citing an anonymous source. The source claimed that the purpose of LVMH’s blockchain is to authenticate luxury goods – which does, of course, make sense, from both a brand and tech perspective.
LVMH’s share price has risen by 28% so far this year
Source: Yahoo Finance
According to “two people familiar with the project” LVMH has had a full team of blockchain specialists working secretly at the company for over a year. This team has been collaborating with Ethereum design studio ConsenSys and Microsoft Azure to create AURA, which has been “built using a permissioned version of the Ethereum blockchain called Quorum, which is focused on data privacy and was developed by JPMorgan.”
A source explained AURA’s purpose: “To begin with AURA will provide proof of authenticity of luxury items and trace their origins from raw materials to point of sale and beyond to used-goods markets. The next phase of the platform will explore protection of creative intellectual property, exclusive offers and events for each brands’ customers, as well as anti-ad fraud.”
That’s… well, that’s a very sensible idea. Especially when you ponder on the fact that LVMH itself owns more-than 60 luxury brands and netted revenues of $53 billion last year. This is the biggest player in a very big business – one which is uniquely susceptible to particular types of fraud that an innovation like this could combat.
The source went on to explain that LVMH chose to design their own blockchain rather than employ an existing authentication system because they didn’t see the point in adding a third party between their brands and their partners. Other luxury players will, reportedly, have the option to “buy in” to Aura, becoming shareholders and thereby benefiting from its services.
Dominion holds LVMH in its Global Trends Luxury Fund.
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